Green Mountain’s Deal With Coke Fails to Dent SodaStream

Makers of D.I.Y. drink machines have been seen as potential targets of the soda giants. Now that Coke has a partner, SodaStream and PepsiCo are considered a natural pairing.Credit Mira Oberman/Agence France-Presse — Getty Images

But SodaStream’s stock instead jumped on Thursday, at one point rising nearly 12 percent, valuing the company at over $807 million.

What gives? Investors may be betting on what Bill Schmitz, an analyst at Deutsche Bank, said was the “possibility that PepsiCo follows Coke’s lead” and forms a partnership with SodaStream.

Behind Coke’s $1.25 billion investment in Green Mountain, in which the soda giant will take a 10 percent stake, is a hedge against the continuing stagnation of the traditional soft-drink business. One business that has sprouted amid the decline of sales of Coke and Pepsi is the make-your-own-soda sector, led by SodaStream.

Under the terms of Wednesday’s deal, Green Mountain will produce pods for various Coke brands that work with its forthcoming Keurig Cold machine, scheduled to make its debut next year.

Moves by Coke have often prompted responses by PepsiCo, most famously when the latter scooped up the Quaker Oats Company in December of 2000, only a month after Coke’s board blocked an all-but-done deal at the last minute.

There has for some time been speculation that both Coke and PepsiCo were interested in SodaStream. PepsiCo denied a report in an Israeli newspaper last summer that it was in talks to buy the smaller company.

A spokesman for PepsiCo declined to comment on Thursday’s round of speculation.